Unfortunately, 10 out of 12 types of cargo are also expected to be down next quarter. This includes coal, which Cramer thinks could be going away all together. The combination of tremendous oversupply in the U.S., a strong dollar for exports and a huge shift from coal to natural gas in major utilities has led to a 31 percent drop in business.
Cramer was stunned by CSX's expense control from its management. It has pulled off a 12 percent improvement versus last year, and has continued to make far more money with less sales and headcount.
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That is a reason to buy the stock, Cramer said, but only for investors who believe three things. First, that the global economy could get better, which could drive volumes. Second, that CSX will be able to keep costs down to allow gross margins to expand. The third is that CSX will not lose its business to trucking.
"There is a belief that better productivity combined with increased traffic is going to make this stock look mighty cheap a year from now," Cramer said.
The story of CSX is just one of many stories that Cramer expects to hear repeated in earnings season. He heard a similar story from Alcoa on Monday, and from the oil patch.
Ultimately, companies may have seen these declines coming and shifted business to accommodate, which is why they are doing better than most though.
What if things get better?
"Huge earnings swings, swings so fabulous that you will want to own the stock snow, before the earnings turn, especially with a stock like CSX," Cramer said.
That is Cramer's recipe to how stocks can go higher on bad news. These stocks already reflect the bad news, and that is when Cramer says investors should buy — not when they are already roaring.